American, US Airways announce $11 billion merger

American Airlines and US Airways officially announced Thursday they plan to merge, a move that will put an end in sight to American's bitter bankruptcy and create the largest U.S. airline by traffic.

The newly merged entity will keep the American brand and its Dallas headquarters, and it will remain in the oneworld alliance, which includes British Airways. That ensures the new entity will maintain American’s coveted access to London’s Heathrow Airport, British Airways’ main hub and the third-busiest airport in the world.

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“Today, we are proud to launch the new American Airlines — a premier global carrier well-equipped to compete and win against the best in the world,” said Tom Horton, the chairman, president and CEO of American Airlines.

In a news release, the companies said they expect to maintain all of their current hubs and continue serving all current destinations. American's hubs include Dallas, New York, Los Angeles, Miami and Chicago. US Airways' hubs include Charlotte, Philadelphia and Phoenix.

If that expectation holds true, it would likely defuse much of the potential for a member of Congress throwing a monkey wrench into the works as regulators pore over the merger for approval. Some had speculated that the Charlotte hub could be endangered by the merger.

The merger is likely to win approval and doesn’t seem in for any major bumps.

Because their route networks are largely complementary, most analysts believe the merger will be approved after the Justice Department conducts its antitrust review.

In addition to the Justice Department review, the bankruptcy judge overseeing AMR’s restructuring must sign off on the deal. The Transportation Department serves in an advisory role.

The other big complication that often threatens to trip up other airline mergers — the endorsement of the airline’s pilots union — has already largely been sorted out. The unions representing pilots at both companies have already agreed to collective bargaining terms effective upon the merger’s completion.

This article first appeared on POLITICO Pro at 9:11 a.m. on February 14, 2013.